Open Records Decision No. 305
January 18, 1982
Re: Availability under the Open Records Act of bid proposal filed with Texas
Education Agency
Mr. Raymon L. Bynum
Commissioner of Education
Texas Education Agency
201 East 11th Street
Austin, Texas 78701
Dear Mr. Bynum:
In June 1981, the Texas Education Agency advertised for proposals to furnish
support services for the conduct of the 1982 and 1983 Texas Assessment of Basic Skills
program. This assessment will measure the skills of public school students in certain
grades. Of the proposals submitted, the one filed by Westinghouse Data Score Systems
was judged the best, and that company received the contract.
You have received a request from CTB/McGraw-Hill for a copy of the
Westinghouse proposal. This proposal contains six sections and an appendix. We
understand that Westinghouse is willing to release everything in the proposal except for
one portion of the appendix, namely, a test booklet stamped “proprietary.” You ask
whether you may withhold this booklet under sections 3(a)(4) and/or 3(a)(10) of the
Open Records Act, article 6252-17a, V.T.C.S., which except from required disclosure:
(4) information which, if released, would give advantage to
competitors or bidders;
. . .
(10) trade secrets and commercial or financial information obtained
from a person and privileged or confidential by statute or judicial
decision.
In a letter which you forwarded to us, Westinghouse advances the following
argument:
Our booklets qualify as 'trade secrets' under both definitions
accepted in Texas. [see below] Under the Restatement definition,
they are patterns or devices used in our Test and Measurement
business which have given and will continue to give an advantage
over our competitors. The test booklets are manufactured to secure
physical integrity from the time the booklets leave the printing press
until they are machine-trimmed prior to scoring, yet the contents are
readily accessible to elementary school children taking the test. The
secure, yet accessible design of the booklets, wholly new to the
testing industry, was developed to meet the demands of the 1981-
1983 TABS, yet will be used in many of our test and measurement
activities.
Although firms in the industry have been trying to solve the
simultaneous demands of security and accessibility, Westinghouse is
the first to succeed. Westinghouse is now in the process of getting
the design patented. Information on our unique process would be
extremely valuable to the numerous firms in the Test and
Measurement Industry, because security of test contents is basic to
the testing process. Westinghouse has thus far expended over
$15,000 on development and is close to completion of necessary
field testing of the design. . . .
The focus and definition of 'trade secrets' in the Texas Penal Code is
on efforts of the owner to keep secret the trade secret. Our Iowa
City facility maintains extensive security measures because of the
sensitivity of our business -- automatic data processing. We have
professional security guard service twenty-four hours each day,
seven days a week; television monitoring of all facility access;
employee badge requirements; escort and badge requirements for all
visitors; restricted access to sensitive areas; vault storage for critical
information; remote controlled electrical door locks; and security
bonds for employees in critical areas. Our Trafford facility has
similar protective measures.
Westinghouse responded to the Texas Education Agency request for
proposal by providing a sample of the test booklet with each copy of
the proposal submitted. . . . The samples were prominently stamped
PROPRIETARY. There are no other test booklets available outside
Westinghouse. Following distribution of test booklets to hundreds
of thousands of Texas school children in early 1982, the booklets
may become available to outsiders in spite of Westinghouse security
efforts. However, the unique process used in making them should
remain secret.
In your letter to this office, you state that:
. . . the process for manufacturing the sample booklet is a 'trade
secret' and would be revealed if their competitors could inspect the
sample blank booklet. The manner in which this booklet is
assembled provides a unique and innovative solution to securing test
questions, or other information, prior to use in documents which are
to be processed by optical scanning equipment.
The test booklets that will be administered on a state-wide basis are
secure materials. They are not available for consumption or review
by anyone other than designated school districts personnel
responsible for administration. The booklets will be sent by
Westinghouse directly to the designated persons in the districts who
will return them directly for scoring. This procedure ensures the
confidentiality of the test questions. As a result, the process for
manufacturing the test booklets would remain secure.
Texas has adopted the definition of “trade secret” contained in the Restatement of
Torts, section 757, comment (b) 1939. Hyde Corporation v. Huffines, 314 S.W.2d 763,
766 (Tex. 1958). See Open Records Decision Nos. 238 (1980); 184 (1978); 175 (1977).
That definition provides:
A trade secret may consist of any formula, pattern, device or
compilation of information which is used in one's business, and
which gives him an opportunity to obtain an advantage over
competitors who do not know or use it. . . .
The Texas Penal Code, in making theft of a “trade secret” a third degree felony, defines
it as:
. . . the whole or any part of any scientific or technical information,
design, process, procedure, formula, or improvement that has value
and that the owner has taken measures to prevent from becoming
available to persons other than those selected by the owner to have
access for limited purposes.
Penal Code §31.05(a)(4).
The Restatement lists six factors to be considered in determining whether
particular information is a trade secret:
(1) the extent to which the information is known outside of his
business; (2) the extent to which it is known by employees and
others involved in his business; (3) the extent of measures taken by
him to guard the secrecy of the information; (4) the value of the
information to him and to his competitors; (5) the amount of effort
or money expended by him in developing the information; (6) the
ease or difficulty with which the information could be properly
acquired or duplicated by others.
Restatement of Torts, comment b (1939).
It is unquestionably true that intangibles as well as tangibles may qualify as a
“trade secret.” In Brown v. Fowler, 316 S.W.2d 111, 114 (Tex. Civ. App. - Fort Worth
1958, writ ref'd n.r.e.), for example, the court stated that:
A trade secret may be a discovery rather than an invention, and may
result from industry or application, or may be merely fortuitous. It
may be any secret of a party important to his interest. The means by
which the discovery is made may be obvious, and the
experimentation leading from known factors to presently unknown
results may be simple and lying in the public domain. But these
facts do not destroy the value of the discovery and will not
advantage a competitor who by unfair means obtains the knowledge
without paying the price expended by the discoverer. . . .
In this instance, Westinghouse is essentially seeking to protect the process it has
developed to manufacture the test booklet in question. Based on the facts and arguments
presented by you and by Westinghouse, we conclude that this process qualifies as a
“trade secret” under the standards discussed above. Inasmuch as the release of this
booklet would effect the release of this trade secret, you may withhold it from disclosure
under section 3(a)(10).
Very truly yours,
Mark White
Attorney General of Texas
John W. Fainter, Jr.
First Assistant Attorney General
Richard E. Gray III
Executive Assistant Attorney General
Prepared by Jon Bible
Assistant Attorney General
Approved:
Opinion Committee
Susan L. Garrison, Chairman
Jon Bible
Jim Moellinger
Bruce Youngblood